[Congressional Record Volume 157, Number 74 (Thursday, May 26, 2011)]
[Senate]
[Pages S3441-S3442]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CARDIN (for himself, Mr. Blunt, and Ms. Stabenow):
  S. 1120. A bill to encourage greater use of propane as a 
transportation fuel, to create jobs, and for other purposes; to the 
Committee on Finance.
  Mr. CARDIN. Mr. President, I rise today to introduce the Propane 
Green Autogas Solutions Act of 2011. I am pleased to note that the 
junior Senators from Missouri, Mr. Blunt, and Michigan, Ms. Stabenow, 
are original cosponsors of this measure. Our bill extends for five 
years Federal Alternative Fuel Tax Credits for Propane Used as a Motor 
Fuel, Propane Vehicles, and Propane Refueling Infrastructure.
  Propane ``autogas'' is a reliable, domestically produced alternative 
fuel with lower greenhouse gas, GHG, emissions than gasoline. Sixty 
percent of propane, also known as liquefied petroleum gas, LPG, derived 
from natural gas processing and 40 percent is a byproduct of crude oil 
refining. Since LPG is derived from fossil fuels, burning it releases 
carbon dioxide, CO2. The advantage is that LPG releases less 
CO2 per unit of energy than oil and burns cleanly with 
regard to particulates.
  At present, one propane-powered light-duty vehicle, LDV, and several 
heavy-duty vehicle, HDV, propane engines and fueling systems are 
available from U.S. original equipment manufacturers, OEM. Because 
other countries offer more OEM options in propane vehicles, thorough 
testing to compare emissions with reformulated gasoline has been 
conducted on these vehicles and engines in Europe. Two of these tests 
were combined and the results are promising with respect to lower 
particulate matter, PM, nitrogen oxides, NOX, carbon 
monoxide, CO, and total hydrocarbon, THC, emissions, as the chart below 
details:
  To augment LPG's generally cleaner combustion properties, propane 
engines can be calibrated to choose between pollutants, making the 
engine additionally useful in achieving regional or local pollution-
reduction targets. A rich calibration reduces nitrogen oxides, 
NOX, at the expense of increasing CO and non-methane 
hydrocarbons and a lean calibration does just the opposite.
  Propane is in surplus worldwide with 93 percent of U.S. propane 
produced domestically when combined with supply from Canada. A national 
infrastructure of pipelines, processing facilities, and storage, i.e., 
59 million barrel capacity in Texas alone, already exists for the 
efficient distribution of propane and there are roughly 3,200 propane 
dispensing stations across the U.S. Propane supply is expected to 
increase over the next several decades, which means more consumer 
availability and price stability.
  Commercial fleets are the propane autogas vehicle target market. The 
Energy Policy Act of 2005 (EPACT 2005) and the 2005 Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users, 
SAFETEA-LU, transportation reauthorization established significant tax 
incentives for propane autogas to stimulate its use in motor vehicles 
to reduce U.S. dependence on foreign oil and reduce environmental 
impacts associated with gasoline and diesel fuel use. The 2005 
legislation provided the following alternative fuel tax credits that 
benefit propane autogas, all of which would be extended under the 
legislation Senators Blunt and Stabenow and I are introducing today.
  Propane Fuel Credits--SAFETEA-LU included a 50 cent per gallon credit 
for propane sold for use in motor vehicles. This credit expires at the 
end of 2011.
  Propane Vehicle Credits--EPACT 2005 included a tax credit to 
consumers who purchase OEM propane vehicles or convert gasoline or 
diesel engines. The amount of credit the consumer receives varies 
depending on vehicle weight and emissions. This credit is currently 
expired.
  Propane Infrastructure Credits--EPACT 2005 provided a tax credit 
amounting to 30 percent of the cost of a fueling station, not to exceed 
$30,000 per station. This credit expires at the end of 2011.
  The Propane Act would extend these three tax credits for 5 years. For 
the credits to have a meaningful effect in firmly establishing a robust 
propane autogas market, they should be in place for a defined period of 
time, not extended from year-to-year in a haphazard fashion. Congress 
should not wait to act until the credits are about to expire because 
market uncertainty regarding the credits undermines the effectiveness 
of the incentives and discourages the kind of investment that Congress 
wants the private sector to make in alternative fuels. The Propane 
Green Autogas Solutions Act, if enacted, would offer the long-term 
policy commitment necessary to continue building essential alternative 
fuel infrastructure and bolster a burgeoning autogas market. Private 
investment is much more likely to occur when the availability of the 
tax credits is assured in the long-term so the propane industry can 
create the economies of scale necessary to make propane autogas a 
viable and competitive alternative fuel.
  There is no score for the bill yet. The National Propane Gas 
Association, NPGA, has retained an economic research firm to perform a 
comprehensive economic review that will look at costs and offsetting 
benefits, job creation, economic growth, etc.; foreign petroleum 
gallons displaced; and the positive environmental impact of extending 
the tax credits. The study will be available shortly and will share it 
with my colleagues when it becomes available.
  Recent rapid price increases for gasoline and diesel fuel have hurt 
Americans families and businesses. This weekend is Memorial Day 
weekend, the unofficial beginning of the summer and the summer driving 
season. Our Nation needs to come to grips with a few fundamental facts. 
We have 2-3 percent of the world's oil reserves. We account for about 5 
percent of the world's population. We currently produce 11 percent of 
the world's oil, up 11 percent over the last 2 years, in large part 
because we have more drilling rigs in operation right now than the rest 
of the world combined--by 50 percent. We account for 25 percent of the 
world's oil consumption. ``Drill here, drill now, pay less'' is a 
catchy slogan, but it's not a solution to our energy woes. As T. Boone 
Pickens himself has said, we cannot drill our way of this problem. The 
best way for the United States to put downward pressure on gasoline and 
diesel prices is through demand reduction since we are the world's 
biggest consumers of petroleum products by far. The Propane Green 
Autogas Solutions Act offers one way to reduce our demand--by 
substituting propane for gasoline or diesel fuel. Propane is a domestic 
transportation fuel. It is less

[[Page S3442]]

expensive than gasoline and diesel fuel. It burns more cleanly. These 
are all good things. I urge my colleagues to support this bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1120

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Propane 
     Green Autogas Solutions Act of 2011''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment is expressed in 
     terms of an amendment to a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     SEC. 2. MODIFICATION AND EXTENSION OF ALTERNATIVE FUEL 
                   CREDIT.

       (a) Alternative Fuel Credit.--Paragraph (5) of section 
     6426(d) is amended by inserting ``, and December 31, 2016, in 
     the case of any sale or use involving liquefied petroleum 
     gas)'' after ``hydrogen''.
       (b) Alternative Fuel Mixture Credit.--Paragraph (3) of 
     section 6426(e) is amended by inserting ``, and December 31, 
     2016, in the case of any sale or use involving liquefied 
     petroleum gas)'' after ``hydrogen''.
       (c) Payments Relating to Alternative Fuel and Alternative 
     Fuel Mixtures.--Paragraph (6) of section 6427(e) is amended--
       (1) in subparagraph (C)--
       (A) by striking ``subparagraph (D)'' in subparagraph (C) 
     and inserting ``subparagraphs (D) and (E)'', and
       (B) by striking ``and'' at the end thereof,
       (2) by striking the period at the end of subparagraph (D) 
     and inserting ``, and'', and
       (3) by adding at the end the following:
       ``(E) any alternative fuel or alternative fuel mixture (as 
     so defined) involving liquefied petroleum gas sold or used 
     after December 31, 2016.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to liquefied petroleum gas sold or used after the 
     date of the enactment of this Act.

     SEC. 3. EXTENSION AND MODIFICATION OF NEW QUALIFIED 
                   ALTERNATIVE FUEL MOTOR VEHICLE CREDIT.

       (a) In General.--Paragraph (4) of section 30B(k) is amended 
     by inserting ``(December 31, 2016, in the case of a vehicle 
     powered by liquefied petroleum gas)'' before the period at 
     the end.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 4. EXTENSION OF ALTERNATIVE FUEL VEHICLE REFUELING 
                   PROPERTY CREDIT.

       (a) In General.--Subsection (g) of section 30C is amended 
     by striking ``and'' at the end of paragraph (1), by 
     redesignating paragraph (2) as paragraph (3), and by 
     inserting after paragraph (1) the following new paragraph:
       ``(2) in the case of property relating to liquefied 
     petroleum gas, after December 31, 2016, and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
                                 ______